scholarly journals Estimating a Fiscal Reaction Function for Nigeria

2020 ◽  
pp. 35-63
Author(s):  
Patricks Ogiji
Keyword(s):  
Reaction Model ◽  
Reaction Function ◽  
Budget Deficits ◽  
Long Run ◽  
Gradual Process ◽  
Fiscal Balance ◽  
Fiscal Reaction Function ◽  
Generation Capacity ◽  
The Government ◽  
The Impact

The study examines the determinants of fiscal balance and the impact of the selected macroeconomic variables on the primary balance of government. It aims to estimate the fiscal reaction function for Nigeria and determine whether the implementation of fiscal policy is sustainable in the long-run. A Fiscal Reaction model was developed and ARDL technique was used to establish the relationships and interactions among the variables. The study investigated whether the fiscal measures pursued by the government from 2000:Q1 to 2018:Q4 was adequate in addressing the accumulation of huge debt. The analysis of the stylized facts reveals that the government had continued to run budget deficits for almost the entire period, except for a few period. The public debt to GDP, which is a major determinant of the primary balance, is negative and significant implying that a fiscal rule that encourages a strong reduction in debt-to-GDP levels would result in substantial pressure for Nigeria to run large primary surpluses in the future. The CUSUM and CUSUMSQ tests show the recursive residual plots of the fiscal reaction function are within the 5 per cent critical lines, hence, providing evidence of stable fiscal reaction function for Nigeria. The study thus, recommends that, apart from the urgent need for the fiscal authorities to adopt urgent reforms to discourage huge debt accumulation, improve revenue generation capacity and more fundamentally, expenditure switching to improve the quality of expenditure, the transition from primary deficits to primary surpluses should follow a gradual process.

scholarly journals Inflationary Impact of Funding Options for Budget Deficits in Nigeria

2021 ◽  
pp. 41-51
Author(s):  
Apinran Martins ◽  
Ogiji Patrick ◽  
Laniyan Chioma ◽  
Usman Nuruddeen
Keyword(s):  
Federal Government ◽  
Banking System ◽  
Optimal Choice ◽  
Budget Deficits ◽  
Government Bonds ◽  
Distributed Lag ◽  
Government Deficits ◽  
Long Run ◽  
The Government ◽  
The Impact

This paper investigates the inflationary impact of the various financing options for the federal government budget deficit which has accumulated overtime. Using Auto Regressive Distributed Lag (ARDL) methodology and quarterly data over the period 2000Q1 to 2017Q2, the study found significant relationship between inflation and the current financing options of the Government. Overall, the result of our ARDL model affirm that the impact of fiscal spending in Nigeria on inflation is captured more in the short-run since none of the variables is significant in the long-run. In addition, the use of Banking System Financing to fund government deficits has better potentials as the optimal choice because its impact on inflation is insignificant. Federal Government Bonds as a tool for financing budget deficits is also considered an optimal choice because though it causes inflation to rise by the second quarter, but its impact on inflation is expected to fizzle out in the long-run. Ways and Means Advances on the other hand, was shown to have the highest inflationary impact and as such, its use as a tool for financing government deficit should be discouraged. We, therefore, recommend a couple of appropriate policy options for financing budget deficits in Nigeria namely monetary financing and the issuance of federal government bonds. On the policy side, more efficient public expenditure management. Capital market, co-financing arrangements with pension funds and issuance of project-tied bonds, would be beneficial.

scholarly journals Public debt changes in Serbia from 2008 to 2018

2020 ◽  
Vol 10 (1) ◽  
pp. 180-193
Author(s):  
Sanja Bakić
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Budget Deficits ◽  
Debt Structure ◽  
Continuous Increase ◽  
The Public ◽  
Long Run ◽  
The Government ◽  
Sustainable Economic Growth ◽  
The Impact

Public debt are all direct and indirect financial obligations assumed by the government. The continuous increase in public debt and budget deficits is a characteristic of modern market economy of many countries. The paper offers an analysis of Serbia's public debt fluctuations from 2008 to 2018. Besides the public debt levels, we have analyzed public debt structure and the impact of its segments on public debt fluctuations. The main conclusion is that the level of public debt is an extremely important factor which affects Serbian economy and industry. If the public debt is continually kept within reasonable limits in the long run, it can enable sustainable economic growth.

scholarly journals Estimating the Fiscal Reaction Function for Namibia

2020 ◽  
pp. 94-108
Author(s):  
Evelina Julius ◽  
Jacob M. Nyambe ◽  
Omu Kakujaha Matundu
Keyword(s):  
Fiscal Sustainability ◽  
Output Gap ◽  
Percentage Increase ◽  
Reaction Function ◽  
Debt Accumulation ◽  
Long Run ◽  
Primary Deficit ◽  
Fiscal Reaction Function ◽  
The Government ◽  
Debt Levels

This paper estimates the fiscal reaction function for Namibia with the aim of establishing how the Government of Namibia responds to changes in debt levels. The VECM and the ARDL models were adopted to explore the reactions between the two variables. Both the VECM and ARDL confirmed the long-run relationship between the variables and showed that government increases its primary balance (i.e. reduce its primary deficit) by 0.07 percent and 0.31 percent, respectively, for every 1 percentage increase in debt levels. On one end, the results from VECM indicated that fiscal policy in Namibia is pro-cyclical, reflected in a positive estimated effect of the output gap on the primary balance. On the other end, the ARDL model indicated an insignificant relationship between the output gap and the primary balance. The debt targeting analysis performed provides evidence that it is not enough to only reduce the primary deficit for fiscal sustainability. Instead, it is important to grow the economy and improve the ability of debt repayment so that debt accumulation declines. Thus, the paper recommends that Namibia needs not only a positive, but also a strong economic growth if it is to make significant impacts on the debt level and guarantee both debt and fiscal sustainability.

Dampak Insentif Pajak Perumahan Terhadap Potensi Penerimaan Pajak Negara Dan Peningkatan Pendapatan Masyarakat : Kasus Provinsi Papua

2016 ◽  
Vol 1 (1) ◽  
pp. 13-22
Author(s):  
Towaf Totok Irawan
Keyword(s):  
Low Income ◽  
House Prices ◽  
Tax Incentives ◽  
High Price ◽  
Short Term ◽  
Primary Input ◽  
State Revenue ◽  
Long Run ◽  
The Government ◽  
The Impact

Until now the government and private sector have not been able to address the backlog of 13.5 million housing units for ownership status and 7.6 million units for residential status. The high price of land has led to the high price of the house so that low-income communities (MBR) is not able to reach out to make a home purchase. In addition to the high price of land, tax factors also contribute to the high price of the house. The government plans to issue a policy for the provision of tax incentives, ie abolish VAT on home-forming material transaction. This policy is expected to house prices become cheaper, so the demand for housing increases, and encourage the relevant sectors to intensify its role in the construction of houses. It is expected to replace the lost tax potential and increase incomes. Analysis of the impact of tax incentives housing to potential state revenue and an increase in people's income, especially in Papua province is using the table IO because in addition to looking at the role each sector can also see the impact on taxes (income tax 21 Pph 25 Pph, VAT), and incomes (wage). Although in the short-term impact is still small, but very rewarding in the long run. Keywords: Backlog, Gross Input, Primary Input, Intermediate Input

scholarly journals Do Erratic Rainfalls Hamper Grain Production? Analysis of Supply Response of Rice to Price and Non-Price Factors

Agronomy ◽  
2021 ◽  
Vol 11 (8) ◽  
pp. 1463
Author(s):  
Ghulam Mustafa ◽  
Azhar Abbas ◽  
Bader Alhafi Alotaibi ◽  
Fahd O. Aldosri
Keyword(s):  
Unit Root Test ◽  
Rice Production ◽  
Vector Error Correction ◽  
Supply Response ◽  
Target Time ◽  
Vector Error ◽  
Long Run ◽  
Short Run ◽  
The Government ◽  
The Impact

Increasing rice production has become one of the ultimate goals for South Asian countries. The yield and area under rice production are also facing threats due to the consequences of climate change such as erratic rainfall and seasonal variation. Thus, the main aim of this work was to find out the supply response of rice in Malaysia in relation to both price and non-price factors. To achieve this target, time series analysis was conducted on data from 1970 to 2014 using cointegration, unit root test, and the vector error correction model. The results showed that the planted area and rainfall have a significant effect on rice production; however, the magnitude of the impact of rainfall is less conspicuous for off-season (season 2) rice as compared to main-season rice (season 1). The speed of adjustment from short-run to long-run for season-1 rice production is almost two-and-a-half years (five production seasons), while for season-2 production, it is only about one-and-a-half year (three production seasons). Consequently, the study findings imply the supply of water to be enhanced through better water infrastructure for both seasons. Moreover, the area under season 2 is continuously declining to the point where the government has to make sure that farmers are able to cultivate the same area for rice production by providing uninterrupted supply of critical inputs, particularly water, seed and fertilizers.

Determinants of Budget Deficit in Nigeria

2021 ◽  
Vol 6 (1) ◽  
pp. 1
Author(s):  
Maimuna M Shehu ◽  
Ibrahim M Adamu
Keyword(s):  
Budget Deficit ◽  
Budget Deficits ◽  
Cointegrating Vector ◽  
Long Run ◽  
Johansen Cointegration ◽  
Short Run ◽  
Johansen Cointegration Test ◽  
The Government ◽  
One Year ◽  
High Level

This paper investigates the factors governing the determination of budget deficit in Nigeria from 1981q1 through 2016q4. Our methodology is based on Johansen cointegration and Vector Error Correction model (VECM) approach. The result from the Johansen cointegration test suggests one cointegrating vector, which indicates the existence of a long run cointegrating relationship. Evidence from the long run and short run parameters suggest that exchange rate, interest rate and one year lag of budget deficit are the major determinants of budget deficit. Therefore, to achieve a realistic fiscal surplus, the government should determine a high level of accountability in its fiscal operations. In addition, any fiscal surplus should be channeled into productive investments to diversify the economy and reduce the likelihood of potential budget deficits.

THE IMPACT OF RESEARCH AND DEVELOPMENT INVESTMENT ON AGRICULTURAL SECTOR PERFOMANCE IN KENYA

2017 ◽  
Vol 2 (1) ◽  
pp. 34-57
Author(s):  
John Githii Kimani ◽  
Dr. George Ruigu Ruigu
Keyword(s):  
Research And Development ◽  
Agricultural Sector ◽  
Research Policy ◽  
Trade Openness ◽  
Policy And Practice ◽  
Long Run ◽  
Short Run ◽  
The Government ◽  
Parsimonious Model ◽  
The Impact

Purpose: The purpose of the study was to assess the impact of research and development investment/expenditure on the agricultural sector performance in Kenya.Methodology: The study took the peoples impact assessment direction. The data for this study was collected from various government agencies such as KARI, ASTI, Kenya Agricultural Sector Data compendium website, FAOSTAT, World Bank among others. Co-integration and error correction modeling methods were used in analyzing the data for this study.Results: Co-integration results for both the parsimonious and non-parsimonious model indicated that that there is a long-run relationship among the variables in the agriculture performance in Kenya. Further, findings in this study indicated that the variables under study were insignificant determinants of the long run Total Factor Productivity of the agricultural sector.  Meanwhile, Trade openness was the only significant determinant of the short run agricultural Total Factor Productivity.Unique Contribution to Policy and Practice: This study recommends the institutionalization of policies aimed at ensuring interaction between the various stakeholders in the agricultural sectors. This interaction will ensure that resources are better allocated to reduce duplication of research and dissemination activities. In addition, greater collaboration among the stakeholders will promote and strengthen the connection between research, policy and the application of research findings. The study further advocates that the government should follow a trade liberazation oriented approach to the agricultural sector as opposed to a trade tightening approach.

scholarly journals The impact of education tax and investment in human capital on economic growth in Nigeria

2020 ◽  
Vol 3 (2) ◽  
pp. 77-86
Author(s):  
Abubakar Aminu ◽  
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Tertiary Education ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Long Run ◽  
Lag Model ◽  
The Government ◽  
Capital Development ◽  
The Impact

This paper investigated the impact of education tax and investment in human capital on economic growth in Nigeria utilizing the Non-Linear Autoregressive Distributed Lag Model of cointegration covering the period of 25 years from 1995 to 2019. The findings reveal that education tax and investment in human capital have positive and significant effect on the growth of the Nigerian economy over the sampled period. The paper recommends that in order to boost the economy, Nigeria would need to, among other policy frameworks, provide a suitable environment for ensuring macro-economic stability through effective utilization of income from education tax that will encourage increased investment in human capital in the public sector. In addition to income from education tax, for effective and speedy economic growth and development in Nigeria, the government, beneficiaries (students/parents), employers of labor and other stakeholders in the society should share the responsibility for financing primary, secondary and tertiary education, so as to provide a solid foundation for human capital development. However, as revealed in this paper, the contribution of education tax and investment in human capital is most likely to be realized over a long-run period than in the short term. Keywords: Education Tax; Investment; Human capital; Economic growth

scholarly journals Cotton Imports and GDP of Indonesia- Cointegration Analysis

2021 ◽  
pp. 149-154
Author(s):  
P. Soumya ◽  
R. A. Yeledhalli
Keyword(s):  
High Speed ◽  
Cointegration Analysis ◽  
Causality Analysis ◽  
The Real ◽  
Real Gdp ◽  
Use Of Technology ◽  
Long Run ◽  
Negative Effect ◽  
The Government ◽  
The Impact

The study examines the impact of cotton imports on the real GDP (Gross Domestic Product) of Indonesia for a period from 1992 to 2018 using ARDL approach and Granger causality analysis. Results of the study indicated that cotton imports have negative effect on economic growth. For every 1% increase in cotton imports the real GDP decreased by 0.107% in the long run. Any disequilibrium in the model is adjusted with a high speed of adjustment of 107.7% in less than a year. Shocks and the trend are adjusted in less than one year. There is no causality between imports of cotton and the real GDP. The study suggested effort should be taken by the government to increase yield of cotton by the use of technology and also a need to initiate farmers to take up cotton farming. 

scholarly journals Moderating Effect of Political Instability on ICT and Economic Growth Nexus in Kenya: ARDL Bound - Co-Integration Approach

2021 ◽  
Vol 04 (10) ◽  
Author(s):  
Matundura Erickson ◽  
Keyword(s):  
Economic Growth ◽  
Political Instability ◽  
Political Stability ◽  
Moderating Effect ◽  
High Interest ◽  
Long Run ◽  
The Government ◽  
The Impact ◽  
Adf Test ◽  
The Relationship

The government has attempted to target specific macroeconomic factors in order to stimulate economic growth in Kenya through monetary and fiscal policies. Despite these efforts, Kenya's GDP growth is hampered by high interest rates and high interest rate volatility. Kenya's ability to address macroeconomic instability hinges on its ability to increase economic growth. Auxiliary evidence shows that perspectives on the relationship between ICT and economic growth are segmented. The goal of this study was to determine the impact of ICT on economic growth in Kenya, as well as the moderating effect of political instability on the relationship. The research was based on Solow's theory of growth. An explanatory research design was used, with data spanning from 1990-2020 obtained from Kenya Bureau of Statistics. In the empirical analysis, the study used the bound test to test for a long-run relationship and the Autoregressive Distributed Lag model (ARDL) to evaluate the relationship between the variables. The data was subjected to an Augmented Dickey Fuller (ADF) test to determine stationarity.The long run ARDL results indicated that the coefficients of; ICT rate were insignificant . However with the introduction of political instability as the moderator ICT was significant and positively affected economic growth. Political instability moderated the relationship between ICT ( and economic growth. As a result, promoting effective governance should help to improve political stability. The findings of this study will help the government figure out how to address the problem of low economic growth. According to the study, the government should invest in the ICT sector to improve its accessibility and affordability. Additionally, the government should work to improve political stability and good governance by gradually establishing institutions that uphold the rule of law and provide security.

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